Charter Communications buys Cox for $21.9 billion, a mega merger in the cable industry

The new entity will be called Cox Communications, but consumers will know it as Spectrum. The companies say they expect to see $500 million in annual cost savings with the merger.

It’s a notable changing of the guard at Cox, which is the longest continuous operator in the industry. The Cox family purchased its first cable television franchise in 1962. At the deal’s conclusion, Cox will own 23% of the combined company.

“We’re honored that the Cox family has entrusted us with its impressive legacy and are excited by the opportunity to benefit from the terrific operating history and community leadership of Cox,” Chris Winfrey, president and CEO of Charter, said in a statement.

The merger comes as cable operators see subscriptions diminish and broadband customers explore other options. Charter lost 60,000 internet customers in the most recent quarter.

The deal with Cox will give Charter an expanded footprint in the South as well as parts of Southern California. That could prove beneficial after Trump halted, at least temporarily, the rollout of the Biden administration’s $42.5 billion broadband-construction program.

Cable and broadband companies have been seeing increased competition on all fronts. Cell carriers are offering broadband service of their own and 5G cellular service is as fast as broadband offerings in some cities. In addition, consumers have moved to streaming services, which have aggressively chased customers with lower prices for the past several years. Live sports have kept many cable subscribers from cancelling their subscriptions, but leagues are increasingly exploring distribution options with those services.